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Roger Sutton CEO, CERA - speaking at Seismics and the City 2014 Building Momentum Local and central government, business and media perspectives on the Canterbury Recovery and Rebuild. What is your take on where we are with the rebuild? What are positive signs of progress and what's in the pipeline? What are the main obstacles and how can they be resolved?
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Seismics in the City28 March 2014
Canterbury Earthquake Recovery
Roger SuttonChief Executive
CERA Disclaimer: CERA has made every effort to ensure that the information contained in this report is reliable but makes no guarantee of its accuracy or completeness and CERA does not accept any liability for any errors. The information contained in this report is not intended to be used as a basis for commercial decisions and CERA accepts no liability for any decisions made in reliance on them.
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Commentary:• There has already been a significant increase in the value of building work in place since the start of 2012.• This was being driven predominantly by the residential sector initially, but the non-residential is beginning to equalise• Note, that this data series excludes horizontal infrastructure (which in Christchurch is approx. $150m per quarter).
Building activity: Greater Christchurch
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q42003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
0
100
200
300
400
500
600
700
800
900
Historic Residential Historic Non-Residential Rolling 12 Month Trend
Qua
rter
ly c
onst
ructi
on e
xpen
ditu
re ($
mil)
3x increase over 12 quarters
$809m /qtr
$260m /qtr
Building work underway
Source: Statistics New Zealand and CERA
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Commentary:• Completion of under-cap claims (EQC: graph 8) is forecast for Dec 2014.
The repair work is behind schedule (see next graphs) but claim settlement is remaining on track as cash settlements increase.
• Completion of over-cap claims (private insurers and Southern Response: graph 9) is forecast for Dec 2016. Actual completions are falling behind insurers own forecast targets creating a significant risk that the end completion date will not be met. See following graphs also.
Undercap residential dwelling insurance claims settled
Residential Insurance: summary
Totals:Total under-cap properties: 145,400Total over-cap properties: 1,962Total under and over-cap: 167,362Total ‘undetermined’: 2,638Total properties with claims: 170,000
Settlements:Under-cap properties: 100,800 (69%)Over-cap properties: 9,119 (42%)Total under and over-cap: 109,919 (65%)
Overcap residential insurance dwelling claims settled
Source: CERA survey
Jun
2013
Sep
2013
Dec 2
013
Mar 2
014
Jun
2014
Sep
2014
Dec 2
014
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Actual Forecasted Q3 2013Forecasted Q4 2013
Dec 2
011
Dec 2
012
Dec 2
013
Dec 2
014
Dec 2
015
Dec 2
016
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Actual Forecast (latest)Forecast (in July 2013)
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SCIRT progress
SCIRT Horizontal Infrastructure Progress (up to 30 January 2014)
Commentary:• The current progress rates for horizontal infrastructure repair are on track for a completion date of December 2016.• Issues currently being examined include levels of service and funding for renewals. These may impact on forecast future work
and/or the total cost and budget available for the work.
Data source: SCIRT
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Canterbury Labour Market
Source: MBIE
Labour Market indicators December 2013 (Change since December 2012)
Indicator Canterbury NZ
(000) (%) (000) (%)
Employment +19.2 +5.9 +67.0 +3.0
Unemployment -4.7 -27.8 -15.0 -9.3
Unemployment Rate -1.5pp. (3.4) -0.8pp. (6.0)
Employment Rate +2.3pp. (69.1) +1.1pp. (64.7)
Indicator Male FemaleEmployment Rate (%) 75.2
(-1.2pp.)63.0
(+3.7pp.)
Unemployment Rate (%) 2.3 (-1.7pp.)
4.7(-1.5pp.)
Canterbury Labour market Indicators by Gender December 2013 (Change since December 2012)
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Construction cost inflation
Commentary:• Construction demand in Canterbury has increased prices, though this has been less apparent towards the end of 2013. • There is a risk that these increases are spilling over into other regions, although the New Zealand figure still remains below the pre
GFC level.
Source: Statistics New Zealand
Construction Cost Inflation (annual)
